The Bell Tolls For The US Stock Market

As 2022 begins, most of the world’s governments have no savings, face each new crisis with more debt, and enjoy bragging about themselves to financially impaled citizens.

Is this a snapshot of the world’s largest photocopier?

The Fed has turned stock, bond, OTC derivative, and mortgage investors into QE welfare recipients.  It’s a sad situation and I’ve argued that the Fed needs to be closed down.  Immediately.

Amongst the sea of fiat-oriented insanity, there are islands of rational thought and action, and the citizens of India are obviously leading the way.

In 2011, the Indian government was only at the beginning of what was to become a carpet bombing of the gold market.  As a result of the taxes and restrictions imposed, there is now an enormous black market for gold.

If unofficial market tonnage is combined with the 1050 tons of official market demand, total Indian citizen demand for the 2021 calendar year was likely in the 1200-1400 tons range.

That’s only going to keep growing in the years and decades ahead.

In the West, there’s a lot of propaganda that “gold pays no interest”.  At my GU Dividends newsletter I’ve been helping subscribers earn a solid 6%-10% a year on highly reputable and liquid gold investments for almost a decade.

In India, it’s normal for investors to get around 8% interest on gold stored with reputable jewellers and dealers.  Gold does pay interest, and a lot of it, but fiat fiends in the West don’t want to hear the truth.

What is probably the most fabulous chart in the world.

Here’s the bottom line: In 2014, I told investors to prepare for a long “head building” process in what could become the greatest chart pattern in the history of markets, then a surge to $2000, then a swoon to about $1500, and then an “Astro blast” to about $3000.

Clearly, gold investors have nothing to fear.  Everything is playing out exactly as suggested. 

What is clearly the most ridiculous long-term chart in the world, the US stock market.

Since 1980, I’ve issued five major buy signals and all of them have been followed by “multi-bagger” gains for investors.  What comes next? 

What comes next is the biggest sell signal in the history of the American fiat empire.  I’ve urged investors to follow the Morgan “Full House” triple sell signals since 1980, but few heeded my call. 

I believe that within 12-24 months, another full house sell signal will be coming from Morgan, and their top analysts are already showing heightened concern.

“A long decline in real interest rates, which allowed stocks to break free from economic fundamentals and their price/earnings multiples to expand….” – Lisa Shalett, chief investment officer, Morgan Stanley Wealth Management, Jan 3, 2022.

Here’s a US rates and inflation chart courtesy of longtermtrends.net.  I’ve added some key annotations.

In all previous bouts of inflation, the US central bank has hiked rates substantially.  In the current situation, it’s done nothing, but promises to do so.  If inflation doesn’t wane (and with US Omicron cases hitting 1 million a day it probably won’t), the Fed is likely to become much more aggressive than stock market investors are prepared for. 

The danger for stock market investors is becoming as extreme as it was in 1966 and 1929.

Metals market enthusiasts should take note of the fact that in the 1975-1980 period, not only did nominal rates rise, but so did real rates… while gold and silver surged, and the miners went parabolic!

The GOAU daily chart.  Investors need to prepare for a hybrid of 1966 and 1929, where the stock market tumbles much more violently than it did in 1966… but the crash is more inflation-oriented than liquidity-oriented.

Inflation is likely to keep rising, creating a panic out of the stock market and into the miners, similar to what happened in the 1960s and 70s. 

Even if gold does dip to my original $1500 area target, I think most of the downside in the miners is already priced into the market… especially the juniors!

Special Offer For Gold-Eagle Readers: Please send me an Email to [email protected] and I’ll send you my free “New Kids On The Golden Block!” report.  I highlight ten junior gold stocks that were quiet in the past, and roaring to life now.  Key buy and sell tactics are included for each exciting stock.

Thanks!    

Cheers

St

Stewart Thomson 

Graceland Updates

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Stewart Thomson is a retired Merrill Lynch broker. Stewart writes the Graceland Updates daily between 4am-7am. They are sent out around 8am-9am. The newsletter is attractively priced and the format is a unique numbered point form.  Giving clarity of each point and saving valuable reading time.

Risks, Disclaimers, Legal

Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:  

Are You Prepared?

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